An agreement finalized last July between the U.S. Dept. of Housing and Urban Development (HUD) and the Cuyahoga County Land Bank will prevent hundreds of severely neglected HUD properties in Cleveland from being sold to negligent owners who have no interest in improving city neighborhoods.
Instead, the dilapidated properties will be either rehabbed or demolished. That’s good news for Cleveland.
“I’m very happy with the way it turned out,” Gus Frangos, Land Bank president, told reporters when the agreement was announced. “HUD has now agreed to refrain from the practice of indiscriminately selling low-value properties, which promotes unwholesome speculation in real estate markets.”
Under the agreement, the Land Bank can purchase HUD homes for $100 each during a first-look period if the homes are valued at $20,000 or less. Likewise, they can buy HUD homes valued between $20,001 and $100,000 at a 30% discount before the homes are offered to the public. If the homes go on the market and don’t sell within 60 days, the Land Bank can purchase them at a 50% discount.
The Land Bank will focus on homes valued at $20,000 or less to get them off the market and estimates at least 80% of homes acquired by the organization might be demolished.
“This is a victory for Cuyahoga County,” said U.S. Sen. Sherrod Brown, who had urged HUD to reach this agreement. “As we work to rebuild our communities devastated by the housing crisis, it’s critical that our efforts aren’t undermined by out-of-state speculators.” HUD will offer eight to 10 foreclosed properties to the Land Bank each month.